E-Invoicing in the UAE: A Step Towards Digital Tax Compliance

The United Arab Emirates (UAE) is embarking on a significant transformation of its tax system with the introduction of e-invoicing. This modern approach aims to streamline business operations, enhance financial transparency, and ensure robust tax compliance. By simplifying, standardizing, and automating the invoicing process, businesses and government entities alike can benefit from near real-time invoice exchanges and seamless tax reporting to the UAE Federal Tax Authority (FTA). Here’s a comprehensive guide to the UAE’s e-invoicing journey and how businesses can prepare for this digital shift.

Introduction of the UAE E-Invoicing Portal

Launched on October 24, 2024, the UAE e-Invoicing Portal provides guidelines, a detailed overview of the e-invoicing program, and an FAQ section to help businesses understand legal and technical requirements.

Key Legislative Changes

UAE has recently introduced two significant Federal Decree-Laws aimed at establishing a legal framework for electronic invoicing (e-invoicing) as part of its broader efforts to modernize tax compliance and enhance operational efficiency.

• Law №16 of 2024: Updates VAT Law to include e-invoicing.
• Law №17 of 2024: Revises Tax Procedures Law for e-invoicing.

These laws set the foundation for digital tax compliance and mandate businesses to adapt their invoicing processes accordingly.

E-Invoicing Timeline

E-invoicing is being rolled out gradually to give companies time to get used to the new method. Here’s a top-level view of the important thing milestones:

• The creation of the standards and certification processes for Accredited Service Providers (ASPs) will start in Q3 2024. This is necessary to guarantee that service providers can help firms with e-invoicing in an efficient manner.
• The UAE government intends to release e-invoicing law in Q2 2025, including the guidelines that companies must adhere to.
• Before complete adoption, a pilot program will begin in December 2025 to allow a small group of enterprises to test the e-invoicing system.
• The initial stage of electronic invoicing for business-to-business (B2B) and business-to-government (B2G) transactions will launch in July 2026.

The E-Invoicing Model: DCTCE & PEPPOL Network

The UAE will adopt the Decentralized Continuous Transaction Control and Exchange (DCTCE) model, using the PEPPOL network for real-time e-invoice exchanges. Accredited Service Providers (ASPs) will help businesses connect to PEPPOL and validate e-invoices.

UAE E-invoicing Workflow

• Supplier (Corner 1) transmits eInvoice data in an agreed format with its UAE accredited Service Provider (Corner 2).
• C2 validates the eInvoice data received from C1 and converts it into the UAE standard eInvoice xml format (if C2 has received the eInvoice in a different format from C1).
• C2 transmits the eInvoice (in the xml format) with the buyer’s UAE accredited Service Provider (Corner 3)
• C3 send an acknowledgement to the C2 that the eInvoice has been received successfully and transmits the eInvoice to the buyer (Corner 4)
• C2 reports the tax related data of the eInvoice to the central data platform that is managed by the FTA (Corner 5)
• C5 sends an acknowledgement to the C2 that the eInvoice has been successfully reported.
• C2 forwards the C3 exchange acknowledgment and C5 reporting acknowledgement to C1.

Preparing Your Business for E-Invoicing

Businesses need to take proactive steps to align with the new e-invoicing requirements:

• Assess your systems: Evaluate whether or not your cutting-edge invoicing process can accommodate e-invoices or in case you want to upgrade.
• Choose an approved ASP: Partner with an era issuer approved through the UAE Ministry of Finance to help you with the e-invoicing process.
• Update your invoicing tactics: Align your invoicing strategies with the brand new necessities to ensure complete UAE e-Invoice compliance with the e-invoicing system.

Businesses must act now to ensure a seamless integration with the PEPPOL network and full compliance with UAE regulations.

How Melasoft Supports Your Business?

As a leader in e-invoicing solutions, Melasoft is dedicated to simplifying your transition to the UAE’s e-invoicing system. Our Peppol-ready solutions are designed to ensure secure and compliant invoice transmission, seamlessly integrating with the FTA portal.

How Melasoft Supports Your Business?

As a leader in e-invoicing solutions, Melasoft is dedicated to simplifying your transition to the UAE’s e-invoicing system. Our Peppol-ready solutions are designed to ensure secure and compliant invoice transmission, seamlessly integrating with the FTA portal.

Why Choose Melasoft?

1. Peppol-Ready: As a certified Peppol Access Point Provider, we adhere to Peppol standards, ensuring compliance with the UAE’s Continuous Transaction Controls (CTC) model.
2. End-to-End Solution: From issuing and submitting e-invoices to tracking their status and receiving email notifications, Melasoft offers a comprehensive solution.
3. FTA Portal Integration: Melasoft connects your business system to the FTA’s e-billing platform, enabling real-time submission of e-invoices in formats such as XML or JSON.
4. 100% Compliance: Our solutions ensure full compliance with the UAE’s e-invoicing regulations.
5. Web-Based Portal: Manage your entire e-invoicing process from one central platform with a user-friendly interface.

Let Melasoft streamline your e-invoicing process and keep your business compliant with ease. Contact us today to learn how we can support your transition to the UAE’s e-invoicing system.